Sample Business Contracts

Technology License and Distribution Agreement - Sun Microsystems Inc. and OpenTV Inc.

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                               TECHNOLOGY LICENSE
                             DISTRIBUTION AGREEMENT

      This Technology License and Distribution Agreement (the "Agreement") is
entered into this 20th day of March, 1998 (the "Effective Date") between Sun
Microsystems, Inc., acting by and through its JavaSoft business unit ("Sun")
with its principal place of business at 901 San Antonio Road, Palo Alto,
California 94303 and OpenTV Inc., a Delaware corporation with a principal place
of business at 3401-A Hillview Avenue, Palo Alto, CA 94304-1320 ("Licensee").


WHEREAS Sun wishes to license its Java(TM) technology, while maintaining
compatibility among Java language based products; and

WHEREAS Sun wishes to protect and promote certain trademarks used in connection
with Java technology; and

WHEREAS Licensee wishes to develop and distribute products based upon Sun's Java

NOW THEREFORE, Sun and Licensee enter into this Agreement on the following


      1.1 "Application Programming Interfaces" or "APIs" means the names of
class library calls and the number and types of arguments they take in invoking
the functionality of such class libraries.

      1.2 "Applet" means a Java application which (i) runs on the Java
Environments and (ii) consists of Java byte codes executable by the Java Runtime
Interpreter (but does not include or incorporate the Java Runtime Interpreter or
the Java class libraries).

      1.3 "Bug Fixes" means correction of errors in either the Shared Part or
Platform Dependent Part of the Technology.

      1.4 "Documentation" means the materials which Sun provides for use with
the Technology, as more particularly identified in Exhibit C, as may be revised
by Sun during the Term.

      1.5 "Derivative Work(s)" means any work which is based upon the
Technology, such as a revision, modification, translation, abridgement,
condensation, expansion, collection, compilation or any other form in which the
Technology may be recast, transformed or adapted, any new material, information
or data relating to and derived from the Technology, the preparation, use
and/or distribution of which, in the absence of this Agreement or other
authorization from the owner, would constitute infringement under applicable

      1.6 "Distributors" means distribution channels designated by Licensee for
distribution of Products, including OEMs, distributors, resellers, dealers and
sales representatives.

      1.7 "Exhibit C" means collectively Exhibits C-1 through C-n which
incorporate into the Agreement the specific terms and conditions for each
Technology licensed hereunder.

      1.8 "FCS" means first commercial shipment of a production version of a
software or hardware product or technology.

      1.9 "Field of Use" means the relevant market segments and/or product areas
for each Technology specified in Exhibit C.

      1.10 "Java Classes" means the specific class libraries associated with
each Technology defined in Exhibit C, as may be revised by Sun during the Term.

      1.11 "Java Environment(s)" means each or all the Java Application
Environment ("JAE"), Personal Java Environment ("pJava"), Embedded Java
Environment ("eJava"), JavaCard

* = Indicates that confidential treatment has been granted for that portion of
    the text as marked and that the confidential portion has been filed
    separately with the U.S. Securities and Exchange Commission.


Environment ("JCE"), JavaOS Environment and Embedded JavaOS Environment, or any
other Java Environment released by Sun during the Term, described in
specifications from Sun, as may be revised by Sun during the Term.

      1.12 "Java Runtime Interpreter" means the program(s) which implement the
Java virtual machine for a particular Java Environment as specified in the Java
Virtual Machine Specification from Sun, as may be revised by Sun during the

      1.13 "Java Test Suites" means the applicable test suites associated with
each Technology, as may be revised by Sun during the Term.

      1.14 "Licensee Open Class(es)" means an additional Java class and
associated API(s) developed by or for Licensee which: (i) extends the
functionality of a Java Environment; and (ii) is exposed to third party software
developers for the purpose of developing additional software which invokes such
additional Java class.

      1.15 "OEM" means an original equipment manufacturer of hardware and/or
software, who integrates Products into its own valued added products or
technologies which represent a significant functional and value enhancement to
the Products, and which are distributed through its established distribution

      1.16 "Platform Dependent Part" means those Source Code files (and
corresponding binary code) of the Technology which are not in a "share"
directory or subdirectory thereof.

      1.17 "Product(s)" means a Licensee product into which the Technology is
implemented or integrated. A Product must: (i) have a principal purpose which is
substantially different from that of the stand-alone Technology; (ii) represent
a significant functional and value enhancement to the Technology; (iii) operate
in conjunction with the Technology; and (iv) not be marketed as a technology
which replaces or substitutes for the Technology. A list of Products current as
of the Effective Date is included in Exhibit C for each Technology. Licensee may
add Products within the designated Field of Use for such Products by written
notification to Sun.

      1.18 "Shared Part" means those Source Code files (and corresponding binary
code) of the Technology which are in any "share" directory or subdirectory

      1.19 "Source Code" means the human readable version, in whole or in part,
of the Technology supplied to Licensee and any corresponding comments and

      1.20 "Standard Extensions" means the additional classes and associated
APIs specified in Exhibit C.

      1.21 "Technology" means each specific Java technology (excluding Tools)
licensed by Sun hereunder as more fully described in Exhibit C, as may be
revised by Sun during the Term, and Upgrades thereto to the extent Licensee is
authorized to receive them.

      1.22 "Term" means the term of the Agreement as specified in Section 9.1.

      1.23 "Tools" means any Java Test Suites, and other development tools, in
source or binary code form specified in Exhibit C, as may be revised by Sun
during the Term.

      1.24 "Trademark License" means the separate agreement entered into by the
parties that specifies the terms and conditions related to the use of
trademarks, logos and branding in connection with Products, and when executed
will be attached hereto for reference as Exhibit D.

      1.25 "Upgrades" means bug fixes, modifications, variations, and
enhancements, to the extent included in a patch or release of the Technology
unless otherwise specified in Exhibit C, which Sun generally licenses as part of
the Technology.

      1.26 "Trade-In Softwares" means Sun's particular Java Environment (other
than pJava) which may be required for the use of any set-top box-related Java
APIs as specified in Exhibit C-2.

      1.27 "Additional Environment" means any additional Java Environment (other
than pJava) which may be made generally available by Sun which includes a
set-top box-related Java API to provide a television set-top box solution, as
specified in Exhibit C-2.



2.1 Source Code Product Development License.

      a. Product Development. Subject to the terms and conditions contained in
      this Agreement, Sun hereby grants to Licensee, solely for the Field(s) of
      Use, a worldwide, non-exclusive, non-transferable license to use and
      modify the Source Code to create Derivative Works including:

            (i) porting of the Platform Dependent Part to platforms other than
      those offered by Sun and specified in Exhibit C;

            (ii) development of Bug Fixes;

            (iii) integration of the Source Code, Bug fixes and Derivative Works
      with other source code of Licensee; and

            (iv) compiling all of the foregoing to create Products.

      b. Product Development Restrictions. In the exercise of the rights granted
      in Section 2.1a. above, Licensee:

            (i) must include the Shared Part complete and unmodified in the

            (ii) may not modify the functional behavior of the Java Runtime
      Interpreter or the Java Classes;

            (iii) may not modify or subset the interfaces of the Java Runtime
      Interpreter or the Java Classes;

            (iv) may not subset the Java Classes;

            (v) may not modify or extend the public class or interface
      declarations whose names begin with "java", "sun.hotjava", "COM.sun" or
      their equivalents in any subsequent naming convention; and

            (vi) may not sublicense or distribute the Source Code or Derivative
      Works thereof, to third parties, except as provided in Section 2.4.

      c. Bug Fixes. Licensee will inform Sun promptly, and no later than it
      informs any third party, of any bugs identified in the Technology, and to
      the extent that Licensee elects to correct such bugs, Licensee will make
      such Bug Fixes promptly available to Sun free of all restrictions as they
      are implemented.

      d. Applet Tags. Any Product that reads or writes hypertext markup language
      (HTML) or standard generalized markup language (SGML) shall use the
      Document Type Definition ("DTD") as specified in Exhibit A when
      referencing the Applet tag, unless another DTD is defined for the Applet
      tag by an industry standard.

22. Source Code Research License.

      a. Subject to the terms and conditions contained in this Agreement, Sun
      hereby grants to Licensee, without the right to sublicense, a worldwide,
      non-exclusive, non-transferable license to use and modify the Source Code
      for internal research and development, to facilitate the development of
      Products. This research license is not subject to the restrictions set
      forth in Section 2.1b above, provided that Licensee may not incorporate
      any of the Source Code or Derivative Works created pursuant to this
      research license into Products or any other products.

      b. If Licensee identifies any changes which are necessary to the Shared
      Part to enable porting to other platforms, Sun will make reasonable
      efforts to evaluate the feasibility of implementing such changes or
      reclassifying the necessary code as Platform Dependent.


      2.3. Documentation License. Subject to the terms and conditions contained
in this Agreement, Sun hereby grants to Licensee, solely for the Field(s) of
Use, a worldwide, non-exclusive, non-transferable license to use, modify,
translate and subset the Documentation to create technically accurate Licensee
documentation associated with the Products.

      2.4 Sublicensing of Source Code. Licensee may deliver and sublicense the
Source Code to third parties (excluding customers of Licensee) located in the
United States, the European Union (as constituted as of the Effective Date),
Finland, Sweden, Norway, Israel, Canada and Japan for the sole purpose of
furnishing services to Licensee in connection with the rights granted in Section
2.1 above; provided that all such third parties shall execute appropriate
documents acknowledging their work-made-for-hire status and/or effecting
assignments of all intellectual property rights with respect to such work to
Licensee or Sun, as appropriate, and undertaking obligations of confidentiality
and non-use with respect to such work. Licensee may deliver and sublicense the
Source Code to third parties in countries other than those set out above,
subject to prior approval of Sun. Sun may, upon its request, review and approve
or reject any documents proposed for use by Licensee prior to any use of such

      2.5 Licensee Open Classes. Subject to the terms and conditions contained
in this Agreement, Sun hereby grants to Licensee, solely for use with Products,
a worldwide, non-exclusive, non-transferable license to use information gained
from access to the Technology to develop Licensee Open Classes, provided that:

      a. Licensee may not include any of the Technology in such Licensee Open

      b. Licensee uses only names for Licensee Open Classes that begin with
      "COM.Licensee" or such other convention as Sun may reasonably require,
      and shall make commercially reasonable efforts to ensure that other
      software which Licensee develops relating to the Technology conforms to
      this convention;

      c. Licensee publishes to the industry, on a non-confidential basis and
      free of all restrictions, the specification for any Licensee Open Class as
      early as is reasonably possible but in no event later than the date on
      which it first provides such specification or an implementation thereof to
      any third party. Included with such specification shall be an appropriate
      test suite sufficiently detailed to allow any third party reasonably
      skilled in the technology to produce implementations compatible with the
      specification. Licensee shall use its reasonable commercial efforts to
      clarify and correct the specification or the test suite upon written
      request by Sun;

      d. Licensee agrees to refrain from enforcing any copyrights or patent
      rights that it might have relating to compatibility or interface, which
      would be infringed by Sun or any third party implementinq the
      specifications for a Licensee Open Class;

      e. Licensee hereby grants to Sun a non-exclusive, worldwide, fully-paid-up
      license to use an unlimited number of copies of the Licensee Open Class,
      in binary form, for Sun's internal use for evaluation and demonstration;

      f. Licensee agrees to negotiate in good faith with Sun the terms of a
      commercial license for the source code of the Licensee Open Class.

      2.6 Tools License Grant. Subject to the terms and conditions contained in
this Agreement, Sun hereby grants to Licensee, a worldwide, non-exclusive,
non-transferable license to use the Tools solely for the purpose of developing
and testing Products. Licensee may not sublicense the Tools unless specifically
provided in Exhibit C.

      2.7 Binary Code Distribution License. Subject to the terms and conditions
contained in this Agreement, Sun hereby grants to Licensee, solely for the
Field(s) of Use, a non-exclusive, worldwide, right and license to distribute the
Product(s) in binary form only, both directly and through Distributors, subject
to the following:


      a. Distributors shall not be authorized to modify any portion of the
      Technology or Derivative Works thereof created by Licensee, and shall be
      obligated to abide by the relevant terms in this Agreement governing use,
      distribution, compatibility, and confidentiality

      b. Licensee or its Distributors shall require an end user license
      agreement for all Product(s) distributed, which includes the minimum terms
      specified in Exhibit C for each Technology, unless it is not customary in
      the industry to include an end user license with such Products;

      c. Licensee shall include Sun's compatibility logo trademark(s) specified
      in Exhibit C on FCS versions of Products distributed hereunder, subject to
      the Trademark License, to indicate that such Products meet the applicable
      compatibility requirements specified in Section 2.8 below.

      d. Licensee may release Product(s) based on pre-FCS versions of the
      Technology, if clearly labeled as a pre-release version and only for beta
      testing purposes.

2.8 Compatibility Requirements.

      a. Unless otherwise specified in Exhibit C, from time to time during the
      term of the Agreement, Sun will make available to Licensee at no cost,
      Java Test Suites for validating that the portion of Licensee's Product
      which interprets Java bytecodes is compatible with the then-current
      version of the applicable Technology and Standard Extensions.

      b. Each new generation of Licensee's reference design for a Product by
      Licensee must pass the most current applicable Java Test Suite that was
      available from Sun one hundred twenty (120) days before FCS of such
      version of the Product. In the event that Licensee elects to use a version
      of the Technology and/or Standard Extension(s) that is newer than that
      which is required under this Section 2.8, then Licensee agrees to pass the
      Java Test Suite that corresponds to such newer version. Once a new
      generation of a Product has satisfied the compatibility requirement set
      forth above, Licensee may continue to ship such new generation after
      delivery by Sun of later versions of the Technology, provided however,
      that later new generations of such Product developed by Licensee must
      satisfy the compatibility requirement set out above.

      c. If Licensee provides Sun with written notice of the existence of a bug
      in a current Java Test Suite, then Licensee shall be released from
      compatibility with the minimum portion of such Java Test Suite necessary
      to avoid the impact of such bug, until such time as Sun provides to
      Licensee a corrected or new Java Test Suite.

      d. Upon request by Sun, Licensee shall promptly make any modifications to
      any Product necessary for it to meet the compatibility requirements set
      out in this Section 2.8.

2.9 Ownership

      a. Ownership by Sun. Sun retains all right, title and interest in the
      Technology, Documentation, Tools, Bug Fixes, and modifications to the
      Shared Pan. Licensee agrees to execute (in recordable form where
      appropriate) any instruments and/or documents as Sun may reasonably
      request to verify and maintain Sun's ownership rights in the foregoing, or
      to transfer any part of the same which may vest in Licensee for any

      b. Ownership by Licensee. Licensee retains all right, title and interest
      in the Products, any License Open Classes, and any Derivative Works
      (excluding Bug Fixes and modifications to the Shared Part), created by or
      for Licensee as authorized under the terms of this Agreement, subject to
      Sun's underlying ownership rights identified in Section 2.9.a.

      2.10 No Other Grant. Each party agrees that this Agreement does not grant
any right or license, under any intellectual property rights of the other party,
or otherwise, except as expressly


provided in this Agreement, and no other right or license is to be implied by or
inferred from any provision of this Agreement or by the conduct of the parties.

      2.11 Trade-In Option. Licensee may at any time within six (6) months of
FCS of the Additional Environment, trade-in the pJava Environment software, on a
one for one basis, for the Trade-in Software, and shall pay the Trade-In Fee(s)
and any applicable Royalties as specified in Exhibit C-2. All other terms and
conditions of the Agreement, except as amended for specific Trade-In Software
concerns, would then transfer and apply to the Trade-in Software and all rights
granted to the pJava Environment would cease. The provisions of Section 10.3
would then apply with respect to the pJava Environment.

      2.12 Additional Software. Licensee may if and when available during the
Term, at any time within six (6) months of FCS of such Additional Environment,
elect to license the Additional Environment subject to any additional terms
generally applicable to licensees of such Additional Environment, and shall pay
the Fee(s) and any applicable Royalties as specified in Exhibit C-2.


      3.1 Licensee Support and Upgrades. Sun shall provide support and Upgrades
to Licensee under the terms and conditions specified in Exhibit C, and payment
terms specified in Section 4.1. The frequency of Upgrades shall be at Sun's sole
discretion provided that any Upgrades will be made available to Licensee at the
same time as Sun makes such Upgrades generally available to commercial licensees
of the applicable Technology.

      3.2 End User Support. Licensee is not authorized to make any
representation or warranty on behalf of Sun to Licensee's end users or third
parties. Licensee shall provide technical and maintenance support service for
its Distributors and end user customers in accordance with Licensee's standard
support practices. Sun shall not be responsible for providing any support to
Licensee's Distributors or customers for the Technology or the Product(s).


      4.1 License and Support Fees. Licensee shall pay to Sun the fees set forth
in Exhibit C within thirty (30) days from the Effective Date of this Agreement.
Thereafter, and for the term of the Agreement, Licensee shall pay the annual
support and Upgrade Fees on or before the anniversary of the Effective Date.

      4.2 Royalty Payments. Payment of royalties shall be made quarterly, shall
be due thirty (30) days following the end of the calendar quarter to which they
relate and shall be submitted with a written statement documenting the basis for
the royalty calculation.

      4.3 Taxes. All payments required by this Agreement shall be made in United
States dollars, are exclusive of taxes, and Licensee agrees to bear and be
responsible for the payment of all such taxes, including, but not limited to,
all sales, use, rental receipt, personal property or other taxes and their
equivalents which may be levied or assessed in connection with this Agreement
(excluding only taxes based on Sun's net income). To the extent Licensee is
required to withhold taxes based upon Sun's income in any country, Licensee
shall provide Sun with written evidence of such withholding, suitable for Sun to
obtain a tax credit in the United States.

      4.4 Records. Licensee shall maintain account books and records consistent
with Generally Accepted Accounting Principles appropriate to Licensee's
domicile, as may be in effect from time to time, sufficient to allow the
correctness of the royalties required to be paid pursuant to this Agreement to
be determined.

      4.5 Audit Rights. Sun shall have the right to audit such accounts upon
reasonable prior notice using an independent auditor of Sun's choice (the
"Auditor"). The Auditor shall be bound to keep confidential the details of the
business affairs of Licensee and to limit disclosure of the results of any audit
to the sufficiency of the accounts and the amount, if any, of a payment
adjustment that should be made. Such audits shall not occur more than once each
year (unless discrepancies are discovered in excess of the five percent (5%)
threshold set forth in Section 4.6, in which case two consecutive


quarters per year may be audited). Except as set forth in Section 4.6 below, Sun
shall bear all costs and expenses associated with the exercise of its rights to

        4.6  Payment Errors. In the event that any errors in payments shall be
determined, such errors shall be corrected by appropriate adjustment in payment
for the quarterly period during which the error is discovered.  In the event of
an underpayment of more than five percent (5%) of the proper amount owed, upon
such underpayment being properly determined by the Auditor, Licensee shall
reimburse Sun the amount of said underpayment and all reasonable costs and
expenses associated with the exercise of its rights to audit, and interest on
the overdue amount at the maximum allowable interest rate from the date of
accrual of such obligation.


        5.1 Notice of Breach or Infringement. Each party shall notify the other
immediately in writing when it becomes aware of any breach or violation of the
terms of this Agreement, or when Licensee becomes aware of any potential or
actual infringement by a third party of the Technology or Sun's intellectual
property rights therein.

        5.2 Proprietary Rights Notices. Licensee shall not remove any copyright
notices, trademark notices or other proprietary legends of Sun or its suppliers
contained on or in the Technology and Documentation and shall incorporate such
notices in all Products, related documentation, as applicable. Licensee shall
comply with all reasonable requests by Sun to include additional copyright or
other proprietary rights notices of Sun or third parties from time to time.


        6.1 Limited Warranty. Sun represents and warrants that the media, if
any, on which the Technology is recorded will be free from defects in materials
and workmanship for a period of ninety (90) days after delivery. Sun's sole
liability with respect to breach of this warranty is to replace the defective
media. Except as expressly provided in this Section 6.1, Sun licenses the
Technology Documentation and Tools to Licensee on an "AS IS" basis.


        6.4 Limitation. The limited warranty set forth in this Section 6.0 are
expressly subject to Section 9.0 (Limitation of Liability).


        7.1 Confidential Information. For the purposes of this Agreement,
"Confidential Information" means the Technology, Tools, Documentation and that
information which relates to (i) either party's hardware or software, (ii) the
customer lists, business plans and related information of either party, and
(iii) any other technical or business information of the parties, including the
terms and conditions of this Agreement and the Trademark License.  In all cases,
information which a party wishes to be treated as "Confidential Information"
shall be marked as "confidential" or "proprietary" (or with words of similar
import) in writing by the disclosing party on any tangible manifestation of the
information transmitted in connection with the disclosure, or, if disclosed
orally, designated as "confidential" or "proprietary" (or with words of similar
import) at the time of disclosure. Sun has no obligation of confidentiality to
Licensee with respect to Bug Fixes, modifications to the Shared part, or the
specifications for any Licensee Open Class.

        7.2 Preservation of Confidentiality. The parties agree that all
disclosures of Confidential Information (as defined under Section 7.1 above)
shall be governed by and treated in accordance with the terms of the
Confidential Disclosure Agreement (the "CDA") attached hereto as Exhibit B and
incorporated herein by reference, modified as follows:

            (a) the definition of "Confidential Information" shall be as set
forth in Section 7.1 above notwithstanding any definition provided in the CDA;


      (b)   the use of Confidential Information shall be limited to the scope of
            this Agreement;

      (c)   the obligations of confidentiality expressed in the CDA shall extend
            three (3) years from the date of disclosure, except with respect to
            Sun Source Code which shall be held confidential in perpetuity; and

      (d)   the CDA shall remain in effect for the term of this Agreement.


      8.1 The parties acknowledge that the Technology may be in pre-release form
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****** ** ************** ** *** ********** ** *************. Upon FCS of the
Technology by Sun, Sun will provide to Licensee a limited indemnity as described
in Sections 8.2-8.3 below.

      8.2 Sun will defend, at its expense, any legal proceeding brought against
Licensee, to the extent it is based on a claim that use of the FCS or subsequent
production version(s) of the Technology, Documentation or Tools is an
infringement of a third party trade secret or a copyright in a country that is a
signatory to the Berne Convention, and will pay all damages awarded by a court
of competent jurisdiction, or such settlement amount negotiated by Sun,
attributable to such claim, provided that Licensee: (i) provides notice of the
claim promptly to Sun; (ii) gives Sun sole control of the defense and settlement
of the claim; (iii) provides to Sun, at Sun's expense, all available
information, assistance and authority to defend; and (iv) has not compromised or
settled such proceeding without Sun's prior written consent. *** ****** *** ****
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      8.3 Should any FCS Technology, Documentation or Tools or any portion
thereof become, or in Sun's opinion be likely to become, the subject of a claim
of infringement for which indemnity is provided under Section 8.2, Sun shall, in
addition to the obligations specified in Section 8.2, as Licensee's sole and
exclusive remedy, elect to: (i) obtain for Licensee the right to use such FCS
Technology; (ii) replace or modify the FCS Technology, Documentation or Tools so
that it becomes non-infringing; or if alternatives (i) or (ii) are not
commercially practicable; (iii) accept the return of the Technology,
Documentation or Tools and grant Licensee a refund of the License Fee, as
depreciated on a five year straight-line basis.


      8.6 Indemnity by Licensee. Except for claims for which Sun is obligated to
indemnify Licensee under Section 8.2 or elects to indemnify under the Trademark
License, Licensee shall defend, at Licensee's expense, any and all claims
brought against Sun by third parties, and shall pay all damages awarded by a
court of competent jurisdiction, or such settlement amount negotiated by
Licensee, arising out of or in connection with Licensee's use, reproduction or
distribution of the ************************** Product(s), or Licensee Open
Classes. Licensee's obligation to provide indemnification under this Section 8.6
shall arise provided that Sun: (i) provides notice of the claim promptly to
Licensee; (ii) gives Licensee sole control of the defense and settlement of the
claim; (iii) provides to Licensee, at Licensee's expense, all available
information, assistance and authority to defend and (iv) has not compromised or
settled such proceeding without Licensee's prior written consent.



      9.1 Limitation of Liability. Except *** ******* ************ ** *********
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******** *** *** ********** ******* ** *** *******

Section 9.0 allocate the risks under this Agreement between Sun and Licensee and
the parties have relied upon the limitations set forth herein in determining
whether to enter into this Agreement.

      9.2 High Risk Activities. The Technology is not designed or intended for
use in on-line control of aircraft, air traffic, aircraft navigation or aircraft
communications; or in the design, construction, operation or maintenance of any
nuclear facility. Sun disclaims any express or implied warranty of fitness for
such uses. Licensee agrees that it will not use or license the Technology for
such purposes, and that it will ensure that its licensees and end users of the
Technology are provided a copy of the foregoing notice.


      10.1 Term. The Term of this Agreement shall begin on the Effective Date
and shall continue for a period of five (5) years, or until terminated as
provided below. Each year for five (5) consecutive years following expiration of
the initial five (5) year term, at Licensee's sole option, Licensee may extend
the Term of this Agreement for one (1) additional year. Licensee shall indicate
its intent to extend the Agreement by written notice to Sun at least thirty (30)
days prior to the expiration of the preceding Term. Termination is permitted
either for breach of this Agreement, upon thirty (30) days written notice to the
other party and an opportunity to cure within such thirty (30) day period, **
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*** ********* **** ****** **** **** ****** **** **** ***** ***** ******* ** ****

      10.2 Effect of Expiration. Upon expiration of this Agreement, Sun shall
retain use, under the terms of this Agreement, of the rights received hereunder,
and Licensee shall be authorized to: (i) distribute Product(s) containing the
version of the Technology incorporated therein at the time of expiration,
subject to Licensee's continued compliance with this Agreement including the
Java Test Suites current at the time of expiration, and payment of royalties,
and (ii) retain one (1) copy of the Source Code to support customers having
copies of Product(s) distributed by Licensee prior to the expiration hereof. All
other rights of Licensee shall terminate upon such expiration.

      10.3 Effect of Termination. In the event of termination of this Agreement
by Sun in accordance with Section 10.1 above, Licensee shall promptly: (i)
return to Sun all copies of the Technology, Documentation, and other
Confidential Information of Sun (collectively "Sun Property") in Licensee's
possession or control; or (ii) permanently destroy or disable all copies of the
Sun Property in Licensee's possession or control, except as specifically
permitted in writing by Sun; and (iii) provide Sun with a written statement
certifying that Licensee has complied with the foregoing obligations except that
Licensee may retain one (1) copy of the Technology in Source Code form to
support customers having copies of Product(s) distributed by Licensee prior to
the termination hereof. All rights and licenses granted to Licensee shall
terminate upon such termination. Notwithstanding the foregoing, Licensee
end-users would be permitted continued use of any products purchased prior


to the termination under the terms of their agreement with Licensee provided
they are not otherwise in breach of the terms of this Agreement or their
agreement with Licensee.

      10.4 No Liability for Expiration or Lawful Termination. Neither party
shall have the right to recover damages or to indemnification of any nature,
whether by way of lost profits, expenditures for promotion, payment for goodwill
or otherwise made in connection with the business contemplated by this
Agreement, due to the expiration or permitted or lawful termination of this

      10.5 No Waiver. The failure of either party to enforce any provision of
this Agreement shall not be deemed a waiver of that provision. The rights of Sun
under this Section 10.0 are in addition to any other rights and remedies
permitted by law or under this Agreement.

      10.6 Survival. The parties' rights and obligations under Sections 2.0,
4.0, 5.2, 7.0, 8.0, 9.0, 10.0, and 11.0 shall survive expiration or termination
of this Agreement, except in the event of termination by Sun under Section 10.1,
in which case Licensee's rights under Section 2.0 shall not survive.

      10.7 Irreparable Harm. The parties acknowledge that breach of Sections
2.0, 5.2, 7.0, 9.2, 11.4 and 11.7 would cause irreparable harm, the extent of
which would be difficult to ascertain. Accordingly, they agree that, in addition
to any other legal remedies to which a non-breaching party might be entitled,
such party shall be entitled to obtain immediate injunctive relief in the event
of a breach of the provisions of such Sections.


      11.1 Notices. All written notices required by this Agreement must be
delivered in person or by means evidenced by a delivery receipt and will be
effective upon receipt by the persons at the addresses specified below.

Sun                                    Licensee

Sun Microsystems, Inc.                 OpenTV, Inc.
901 San Antonio Road                   3401-A Hillview Avenue,
Palo Alto, California 94303            Palo Alto, CA 94304-1320
Attn.: JavaSoft Vice President, Sales  Attn.: Vice President Business
cc: JavaSoft Legal Department                   Development
                                       cc: Legal Department

      11.2 Marketing and Press Announcements. Licensee's initial press
announcement concerning execution of this Agreement must be reviewed by Sun
prior to its release. Licensee hereby authorizes Sun to include Licensee in a
published list of licensees of the Technology.

      Each party shall also be authorized to use the other party's name in
advertising, marketing collateral, and customer success stories, prepared by or
on behalf of such party, for the Technology. The foregoing authorization is
subject to prior written approval of the other named party, such approval not to
be unreasonably withheld or delayed.

      11.3 Partial Invalidity. If any of the above provisions are held to be in
violation of applicable law, void, or unenforceable in any jurisdiction, then
such provisions are herewith waived or amended to the extent necessary for the
License to be otherwise enforceable in such jurisdiction. However, if in Sun's
opinion deletion or amendment of any provisions of the License by operation of
this paragraph unreasonably compromises the rights or increase the liabilities
of Sun or its licensors, Sun reserves the right to terminate the License.

      11.4 U.S. Government Restricted Rights. If Licensee is licensing Product
or accompanying documentation to or on behalf of the U.S. Government, it shall
be made subject to "Restricted Rights", as that term is defined in the Federal
Acquisition Regulations ("FARs") in paragraph 52.227-19(c)(2),


or its equivalent paragraph in the DOD Supplement to the FARs.
Contractor/Manufacturer is: Sun Microsystems Inc., 901 San Antonio Road, Palo
Alto, California 94303.

      11.5 Language. This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions of this
Agreement in any other language shall be for accommodation only and shall not be
binding on the parties to this Agreement. All communications and notices made or
given pursuant to this Agreement, and all documentation and support to be
provided, unless otherwise noted, shall be in the English language.

      11.6 Governing Law. This Agreement is made under and shall be governed by
and construed under the laws of the State of California, regardless of its
choice of laws provisions.

      11.7 Compliance with Laws. The Technology and Documentation, including
technical data, is subject to U.S. export control laws, including the U.S.
Export Administration Act and its associated regulations, and may be subject to
export or import regulations in other countries. Licensee agrees to comply
strictly with all such regulations and acknowledges that it has the
responsibility to obtain such licenses to export, re-export or import the
Technology, Documentation or Product(s) as may be required after delivery to

      Licensee shall make reasonable efforts to notify and inform its employees
having access to the Technology of Licensee's obligation to comply with the
requirements stated in this Section.

      11.8 Disclaimer of Agency. The relationship created hereby is that of
licensor and licensee and the parties hereby acknowledge and agree that nothing
herein shall be deemed to constitute Licensee as a franchisee of Sun. Licensee
hereby waives the benefit of any state or federal statutes dealing with the
establishment and regulation of franchises.

      1.9 Delivery. As soon as practicable after the Effective Date, Sun shall
deliver to Licensee one (1) copy of each of the deliverables set forth in
Exhibit C. Licensee acknowledges that certain of the deliverables are in various
stages of completion and agrees to accept the deliverables as and to the extent
completed as of the date of delivery and "AS IS." In the event any deliverable
is already in the possession or custody of Licensee, such item(s) shall, to the
extent used in connection with the rights granted in Section 2.0 above, be
subject to the terms of this Agreement, notwithstanding any pre-existing
agreement or understanding between Licensee and Sun with respect to such items.

      11.10 Assignment and Change in Control. This Agreement may not be assigned
or transferred by either party without the prior written consent of the other
party, which consent shall not be unreasonably withheld or delayed, except that
Sun may assign or transfer this Agreement to a majority-owned subsidiary.

      11.11 Construction. This Agreement has been negotiated by Sun and Licensee
and by their respective counsel. This Agreement will be fairly interpreted in
accordance with its terms and without any strict construction in factor of or
against either party.

      11.12 Force Majeure. Except for the obligation to pay money, neither party
shall be liable to the other party for non-performance of this Agreement, if the
non-performance is caused by events or conditions beyond that party's control
and the party gives prompt notice under Section 11.1 and makes all reasonable
efforts to perform.

11.13 Exhibits

      The following are included herein by reference as integral parts of this

              o Exhibit A -   Document Type Definition
              o Exhibit B -   Confidential Disclosure Agreement
              o Exhibit C -   Technology Specific Terms and Conditions
              o Exhibit D -   Trademark License

      To the extent the terms and conditions of Exhibit C are contrary to the
terms and conditions of this Agreement, the terms and conditions of the Exhibit
C shall govern.

      11.14 Section References. Any reference contained herein to a section of
this Agreement shall be meant to refer to all subsections of the section.

      11.15 No Competitive Restrictions. The Parties agree that nothing in this
Agreement is intended to prohibit Licensee from independently developing or
acquiring technology that is the same as or


similar to the Technology, provided that Licensee does not do so in breach of
Exhibit B to this Agreement.

      11.16 Complete Understanding. This Agreement and the Exhibits hereto
constitute and express the final, complete and exclusive agreement and
understanding between the parties with respect to its subject matter and
supersede all previous communications, representations or agreements, whether
written or oral, with respect to the subject matter hereof. No terms of any
purchase order or similar document issued by Licensee shall be deemed to add to,
delete or modify the terms and conditions of this Agreement. This Agreement may
not be modified, amended, rescinded, canceled or waived, in whole or part,
except by a written instrument signed by the parties.

      IN WITNESS WHEREOF, the parties have caused this Agreement to be
authorized representatives.

Sun:                                    Licensee:

By: /s/ Lee Patch                       By: /s/ J. W. Steenkamp
   --------------------------------        -------------------------------------
Name: Lee Patch                         Name: J. W. Steenkamp
     ------------------------------          -----------------------------------
            (Print or Type)                        (Print or Type)
Title: Vice President                   Title: CEO
      -----------------------------           ----------------------------------
Date: 3/25/98                           Date: 4-15-98
     ------------------------------          -----------------------------------


                                    EXHIBIT A

                            DOCUMENT TYPE DEFINITION

In order to ensure interoperability between all Java compliant browsers, Sun
needs to define the exact notation of applets in HTML documents. The format of
the APPLET tag shall be implementation language independent and SGML compliant.
SGML compliance is important if the APPLET tag is to be accepted as part of the
HTML standard in the future.


      (applet codebase="http:///"
code="" width=400 height=300)         (/applet)

The applet tag has the following attributes:

CODEBASE    The base url of the applet. The applet's code is located relative to
            this URL. If this attribute is not specified, it defaults to the
            document's URL.

CODE        The file in which the applet is located. This file is relative to
            base url of the applet, It cannot be absolute.

ALT         Alternate text which can be displayed by text only browsers.

NAME        The symbolic name of the applet. This name can be used by applets in
            the same page to locate each other.

WIDTH       Required attribute which specifies the initial width of the applet
            in pixels.

HEIGHT      Required attribute which specifies the initial height of the applet
            in pixels.

ALIGN       The alignment of the applet, similar to the img tag.

VSPACE      The vertical space around the applet, similar to the img tag.

HSPACE      The horizontal space around the applet, similar to the img tag.

Note that the position of the applet in the page is determined by the width,
height, align, vspace and hspace attributes just like the img tag.

Applets can access the above attributes using the getParameter() method call
defined in the Applet class. All attribute/parameter names are automatically
folded to lower case. Applets that require parameters in addition to the
predefined ones need to use the param tag. It is unfortunately not legal in SGML
for a tag to have an arbitrary list of attributes. That is why additional applet
parameters explicitly using the PARAM tag have to be named. For example:

      (applet codes="DateItem.class" alt="The Date" width="200 height=40)
      (param name="speaker" value="avh")
      (param name="translator" value="DutchTime")

In addition to the ALT tag, Licensee can include additional text and markup
before the applet end tag. Java compliant browsers will ignore this text, but
browsers that do not understand the applet tag will display it instead of the
applet. For example:

      (applet codebase=classes   code=ImageLoop.class   width=100  height=100)
      (param  name=imgs value="images/duke")


If Licensee were using a Java enabled browser, Licensee would see an animation
instead of this static image. (p)
      (img src=images/duke/T1.gif")

Below is the formal SGML DTD for the APPLET and PARAM tags.

(!ELEMENT APPLET -- (PARAM*, (%text;)*))
          CODEBASE CDATA #IMPLIED -- code base --
          CODE CDATA #REQUIRED -- code file --
          ALT CDATA #IMPLIED -- alternative string --
          NAME CDATA #IMPLIED -- the applet name --
          ALIGN (left|right|top|texttop|middle|
                absmiddle|baseline|bottom|absbottom) baseline


         NAME NAME #REQUIRED -- The name of the parameter --
         VALUE CDATA #IMPLIED -- The value of the parameter --


                                    EXHIBIT B


                               DISCLOSURES BY SUN

                                               Effective Date: December 15, 1997

Sun Microsystems, Inc., by and through its JavaSoft business unit ("Sun") and
Open TV, a corporation having a place of business at 3401A Hillview Ave, PALO
ALTO, CA ("Recipient"), agree that:

1) The Sun information disclosed under this Agreement ("Information") includes
business technical and pricing information relating to Java Technology.

2) The permitted use of information is for the purpose of evaluating the Java
Technology for potential licensing by Recipient.

3. Recipients obligations regarding information expire three (3) years after the
date of disclosure (except for source code, which shall be protected in
perpetuity). Information shall be used solely as permitted above and shall not
be disclosed to a third party. Recipient shall hold information in strict
confidence and shall provide information to its employees only on a need-to-know
basis. Upon termination of this Agreement or Sun's written request, Recipient
shall cease use of information and return or destroy all information.

4. Recipient shall be obligated to protect information which is disclosed orally
or in written form and identified as confidential or proprietary.

5. This Agreement imposes no obligation upon Recipient with respect to
information which Recipient can establish by legally sufficient evidence: (a)
was in the possession of, or was known by, Recipient prior to its receipt from
Sun, without an obligation to maintain its confidentiality; (b) is or becomes
generally known to the public without violation of this Agreement; (c) is
obtained by Recipient from a third party having the right to disclose it,
without an obligation to keep such information confidential; or (d) is
independently developed by Recipient without the use of information and without
the participation of individuals who have had access to information.

6. Disclosure of information is not prohibited if prior notice is given to Sun
and such disclosure is: (a) compelled pursuant to a legal proceeding or (b)
otherwise required by law, information is delivered "AS IS", and all
representations and warranties, express or implied, including fitness for a
particular purpose, merchantability and non-infringement, are hereby disclaimed.
Neither party has an obligation under this Agreement to sell or purchase any
item from the other party. Recipient agrees that any breach of this Agreement
will result in irreparable harm to Sun for which damages would be an inadequate
remedy and, therefore, in addition to its rights and remedies otherwise
available at law, Sun shall be entitled to equitable relief, including
injunction, in the event of such breach. Recipient waives any requirement for
the posting of a bond or other security in the event that Sun seeks such an
injunction. Sun retains ownership of information. Recipient does not acquire any
rights in information, except the limited right to use information as described

7. If Recipient takes or does not take any action (including product
development) relying, in whole or in part, on the information or future
availability of a Sun product described by or based upon the information,
Recipient does so at its own risk and expense. Sun has no obligation under this
Agreement to develop, make available or sell any information, product or
technology. Sun is not liable for any defects or deficiencies in any product,
process or design created by or for Recipient using or relying on the
Information, whether or not caused by defects or deficiencies in the

8. This Agreement constitutes the entire agreement between the parties
concerning its subject matter. Execution of this Agreement in the space provided
below constitutes acceptance by Recipient of the terms and conditions herein.
Delivery of Information to Recipient by Sun's acceptance of the terms and
conditions herein. All additions or modifications to this Agreement must be made
in writing and must be signed by an authorized representative of each party. The
parties agree to comply strictly with all applicable export control laws and
regulations. Any action related to this Agreement will be governed by California
law, excluding choice of law rules.


BY: /s/ J. Steenkamp
NAME: J. Steenkamp


                                    EXHIBIT C


The technologies licensed hereunder are those initialled by both parties below:

   Exhibit        Technology                           Licensee       Sun

     C-1:         Java Application Environment         ________       ____

     C-2:         Personal Java Environment            [ILLEGIBLE]   [ILLEGIBLE]
                                                       -----------   -----------
     C-3:         Embedded Java Environment            ________       ____

     C-4:         Java Card Environment                ________       ____

     C-5:         HotJava Browser                      ________       ____

     C-6:         HotJava Views                        ________       ____

     C-7:         JavaServer Toolkit                   ________       ____

     C-8:         Java Development Tools               ________       ____

     C-9:         HotJava HTML Component               ________       ____

    C-10:         Personal Web Access                  ________       ____


                                   EXHIBIT C-2

                            PERSONAL JAVA ENVIRONMENT


I. Description of Technology and Documentation

a. Required components

The Personal Java Environment consists of the following source code:

i) All the .java files from the following Java packages:

java.lang                     Language Classes
java.lang.reflect                       Stream I/O                      Networking Classes
java.util                     General utilities
java.applet                   Applet Classes
java.awt                      Abstract Window Toolkit
java.awt.image                Image Handling Classes
java.awt.event                delegation event model
java.awt.peer                 Implementation Classes for awt
java.awt.datatransfer         data transfer                 java archive file format java
java.beans                    native component model

ii) Associate sun.*files.

iii) The Source Code for the Java Runtime Interpreter.

b. Tools Suite: a) JavaCheck and b) JavaCode Compact.

C. Documentation.

Java OEM Language Specification
Personal Java OEM API Specification
Java OEM Virtual Machine Specification

*** ******** ** **** *********** ******* ********** ******** *** *** ** *******
***** **** ******* ** ******* ** ********** *****

III. Product List:

IV. Schedule of Fees and Royalties

**    ******* ****** ******* ****

      *** *** ***** ********* ************** *********** ******* ** ********

                        ** *********** *** ** **** **** ********* *****

                        *** ********** *** ** **** **** ********* ***** ***

                        **** ********** *** *** **** **** ********* ****

      ********** ********* *************** *** ** **** ********* **** *** *** **
      ********** ****


b. Upfront per Seat Fee for Distribution of Binary Tools Suite:

Number of Seats                                           Price/Seat

     *                                                    *********
     * ** *                                               *********
     * ** *                                               *********
     * ** **                                              *********
     ** *** **                                            *********

Licensee may use the Tools Suite for internal development **** ** ******* The
above fees are payable by Licensee upon distribution of the Binary Tools Suite
to Licensee's customer. Mandatory one seat minimum for Tools Suite for each
design win. Excluding JavaCheck, the first seat must be node locked, and shall
be limited to use on one workstation and is for use by one developer only. Each
subsequent seat is floating and may be used consecutively by alternate
developers, but only one developer at a time.

c. Per Unit or Concurrent User Royalty:*

*Licensee agrees to pay Sun a minimum amount of ********** in royalties within
the first 5 years of the initial Term based on a royalty rate of ***** *** *****

e. Annual Support and Upgrade Fees: **************** payable in quarterly
installments, the first of such quarterly payments will be on the Effective

f. Trade-in Fee for the first Reference Implementation:              **********

Licensee may Trade-in the pJava Environment for the Trade-In Software as set out
in Section 2.11.

g. Additional Technology: *

* Licensee may elect to add the Additional Environment, if and when available,
to the Agreement as set out in Section 2.12 for an Upfront fee ** * **********
**** ********* ******** ************ ** ***** **** ******* *** *** ***********
** *** ******* *********** **** ***** ** ***** *** *** **** ******* **** ******
*** ******* **** ** ***** *** *** **** ***** **** ** ** *** ********** ** * ***
**** **********

V. Compatibility Requirements

Products must fully comply with the Documentation specified in Section I.c
above, and pass the Java Test Suites for the Personal Java Environment and any
included Standard Extensions, pursuant to the requirements of Section 2.8 of the
Agreement. Licensee may self-certify such compatibility unless Sun policy
requires verification of compatibility by an independent test facility
designated by Sun, at Licensee's expense. Licensee may not incorporate or
otherwise distribute a Licensee Open Class which implements functionality
substantially similar to any Java Classes required in another Java Environment.

VI. Compatibility Logo: Java Powered

VII. Description of Support and Upgrades

a. Updates and Bug Tracking. Subject to payment of the fees specified above,
Licensee shall have access to the Technology, Updates and the JavaSoft bug
tracking database via Sun's commercial licensee web site, and shall be included
on Sun's commercial licensee general support alias. Licensee shall have access
to the JavaSoft commercial licensee FTP site for the purpose of down loading FCS
releases of Updates, as well as early access versions of the Technology as Sun
makes such versions available.

b. Technical Support. In addition to the Updates and bug reporting specified
above, Sun shall provide up to the equivalent of *** ******* ***** **** engineer
to provide technical support to Licensee including email, facsimile and
telephone support (during regular business hours Pacific Standard Time). The
selection of the support engineer shall be at Sun's discretion, subject to
Licensee's reasonable approval. Licensee may designate a maximum of three (3)
contacts within Licensee's organization to interface with the Sun support
organization. The support engineer will provide the following services:

      i) arrange meetings or discussions with Sun technical and management


      ii) provide technical assistance in development of Permitted Derivative
      iii) respond to bug reports from Licensee;
      iv) develop bug fixes;
      v) bug tracking for releases;
      vi) provide interim releases if the need arises; and
      vii) provide existing and future Documentation as available.

VIII. End user License Terms

For Products distributed pursuant to a software license agreement to end users,
Licensee shall include the following terms and conditions. Licensee shall
substitute Licensee's name in place of Sun in each instance where it occurs in
the following text.

1. Restrictions. Software is confidential copyrighted information of Sun and
title to all copies is retained by Sun and/or its licensors. Customer shall not
modify, decompile, disassemble, decrypt, extract, or otherwise reverse engineer
Software. Software may not be leased, assigned, or sublicensed, in whole or in
part. Software is not designed or intended for use in on-line control of
aircraft, air traffic, aircraft navigation or aircraft communications; or in the
design, construction, operation or maintenance of any nuclear facility. Customer
warrants that it will not use or redistribute the Software for such purposes.

2. Export Regulations. Software, including technical data, is subject to U.S.
export control laws, including the U.S. Export Administration Act and its
associated regulations, and may be subject to export or import regulations in
other countries. Customer agrees to comply strictly with all such regulations
and acknowledges that it has the responsibility to obtain licenses to export,
re-export, or import Software. Software may not be downloaded, or otherwise
exported or re-exported (i) into, or to a national or resident of, Cuba, Iraq,
Iran, North Korea, Libya, Sudan, Syria or any country to which the U.S. has
embargoed goods; or (ii) to anyone on the U.S. Treasury Department's list of
Specially Designated Nations or the U.S. Commerce Departments Table of Denial

3. Restricted Rights. Use, duplication or disclosure by the United States
government is subject to the restrictions as set forth in the Rights in
Technical Data and Computer Software Clauses in DFARS 252.227-7013(c) (1) (ii)
and FAR 52.227-19(c) (2) as applicable.


                                    EXHIBIT D
                                TRADEMARK LICENSE
                                (to be attached)

* Indicates that confidential treatment has been granted for that portion of the
text as marked and that the confidential portion has been filed separately with
the U.S. Securities and Exchange Commission.

June 30, 1999                    Final                      Sun Confidential